Books

  • Predictably Irrational: The Hidden Forces That Shape Our Decisions

    090313 Predictably Irrational Book Cover I finally got around to reading this book, and it was worth it.  This
    review has links to videos and related material to help you get more
    from the book.  Bottom-line: It was fun and easy-to-read … with short
    chapters and memorable stories that make practical points.

    Magic, Markets and the Mind … A Little Back-Story.

    Magic fascinated me when I was younger. I loved learning new and cool illusions. There's something satisfying about seeing behind the curtain, and understanding how it works.

    Now, as an adult, I'm struck with how similar that is to my fascination with understanding stock markets and trading techniques.  Of course, increased skill in this area is potentially rewarding financially. But there also is  something intellectually pleasing about believing you can see and understand what's really happening in the markets.

    Taking that a bit further, it's not surprising that people spend so much time and money trying to understand how the mind works. Our brains didn't come with a user's manual; though sometimes it would be useful to have one to help understand why something is happening or
    how to get a different result.

    Some aspects of my mind that truly amaze me, while other parts of my mind confound me. Have you ever asked yourself: How can someone so smart be so dumb, at the same time?  I suspect that most people have.

    Obviously that is why there are whole industries that help shine a light into that darkness. Whether it's through personality or temperament testing, learning to use NLP, or finding some other way for us to optimize our performance or understanding … people want insights and answers.

    That is why I'm happy to review the book Predictably Irrational. It was interesting and fun; and it provides some insights worth having.  Think of it as a few of the missing chapters from our Owner's Manual.

    Predictably Irrational: The Hidden Forces That Shape Our Decisions.

    When it comes to making decisions in our lives, we think were in
    control. We think we're making smart, rational choices. But are we?

    In a series of illuminating, often surprising experiments, Professor Dan Ariely refutes the common assumption that we behave in rational ways.

    His book, Predictably Irrational: The Hidden Forces That Shape
    Our Decisions    , contains an interesting mix of psychology and economics, he calls "behavioral
    economics".   The main point of the book is that while irrational behavior is a
    part of human nature, people tend to behave irrationally in a predictable fashion.

    Consequently, Ariely suggests that we would be better off if we designed systems to compensate for our limitations.  With that in mind, this
    book can change the way you interact with the world, one decision at a
    time.

    Why Smart People Do Dumb Things:

    Blending
    everyday experience with research, he explains how
    expectations, emotions, social norms, and other invisible, seemingly
    illogical forces skew our reasoning abilities.

    Not only do we make
    astonishingly simple mistakes every day, we make these same types
    of mistakes, repeatedly.

    • We consistently overpay, underestimate, and
      procrastinate.
    • We fail to understand the profound effects of our
      emotions on what we want. And
    • We overvalue what we already own.

    Yet
    these misguided behaviors are neither random nor senseless. They are
    systematic and predictable – thus, making us predictably irrational.

    Here is a brief video that explains more about how you can use behavioral economics to combat the Predictably Irrational.



    Here is the direct link     to Dan's speech to Google at the @Google Talks Series.

    The Book Illustrates Some of the Ways We Exercise Bad Judgment in the Economics of Life.

    There are a lot of interesting tidbits in this book.  For example, the book explains why cautious people make poor decisions when excited, or why
    you enjoy the more expensive option over its cheaper counterpart.

    One study in the book shows that Cheap is Good; But Free Seems Better. When asked if they’d like a 15-cent Lindt truffle or a one-cent Hershey’s Kiss, 73% of people buy the truffle. However, simply drop a penny off the price of each – so … a 14 cent truffle or a free Hershey’s Kiss – and only 31% choose the Lindt. Is eating the chocolate you don’t really want worth saving a penny? Probably not; but it is human nature.

    According to Ariely, we should re-examine and re-cast our understanding of economics to reflect the systematic (and unsurprising) irrationality of human nature. Ariely argues that greater understanding of previously ignored or misunderstood forces (emotions, relativity, and social norms) that influence our economic behavior brings a variety of opportunities to better predict individual motivation and consumer choice, as well as economic and educational policies.

    Other Links:

    Links to Other Speeches:

    By the way, there is a whole @Google Talks Series. It is worth exploring.  I especially like the Authors section.

  • Predictably Irrational: The Hidden Forces That Shape Our Decisions

    090313 Predictably Irrational Book Cover I finally got around to reading this book, and it was worth it.  This
    review has links to videos and related material to help you get more
    from the book.  Bottom-line: It was fun and easy-to-read … with short
    chapters and memorable stories that make practical points.

    Magic, Markets and the Mind … A Little Back-Story.

    Magic fascinated me when I was younger. I loved learning new and cool illusions. There's something satisfying about seeing behind the curtain, and understanding how it works.

    Now, as an adult, I'm struck with how similar that is to my fascination with understanding stock markets and trading techniques.  Of course, increased skill in this area is potentially rewarding financially. But there also is  something intellectually pleasing about believing you can see and understand what's really happening in the markets.

    Taking that a bit further, it's not surprising that people spend so much time and money trying to understand how the mind works. Our brains didn't come with a user's manual; though sometimes it would be useful to have one to help understand why something is happening or
    how to get a different result.

    Some aspects of my mind that truly amaze me, while other parts of my mind confound me. Have you ever asked yourself: How can someone so smart be so dumb, at the same time?  I suspect that most people have.

    Obviously that is why there are whole industries that help shine a light into that darkness. Whether it's through personality or temperament testing, learning to use NLP, or finding some other way for us to optimize our performance or understanding … people want insights and answers.

    That is why I'm happy to review the book Predictably Irrational. It was interesting and fun; and it provides some insights worth having.  Think of it as a few of the missing chapters from our Owner's Manual.

    Predictably Irrational: The Hidden Forces That Shape Our Decisions.

    When it comes to making decisions in our lives, we think were in
    control. We think we're making smart, rational choices. But are we?

    In a series of illuminating, often surprising experiments, Professor Dan Ariely refutes the common assumption that we behave in rational ways.

    His book, Predictably Irrational: The Hidden Forces That Shape
    Our Decisions    , contains an interesting mix of psychology and economics, he calls "behavioral
    economics".   The main point of the book is that while irrational behavior is a
    part of human nature, people tend to behave irrationally in a predictable fashion.

    Consequently, Ariely suggests that we would be better off if we designed systems to compensate for our limitations.  With that in mind, this
    book can change the way you interact with the world, one decision at a
    time.

    Why Smart People Do Dumb Things:

    Blending
    everyday experience with research, he explains how
    expectations, emotions, social norms, and other invisible, seemingly
    illogical forces skew our reasoning abilities.

    Not only do we make
    astonishingly simple mistakes every day, we make these same types
    of mistakes, repeatedly.

    • We consistently overpay, underestimate, and
      procrastinate.
    • We fail to understand the profound effects of our
      emotions on what we want. And
    • We overvalue what we already own.

    Yet
    these misguided behaviors are neither random nor senseless. They are
    systematic and predictable – thus, making us predictably irrational.

    Here is a brief video that explains more about how you can use behavioral economics to combat the Predictably Irrational.



    Here is the direct link     to Dan's speech to Google at the @Google Talks Series.

    The Book Illustrates Some of the Ways We Exercise Bad Judgment in the Economics of Life.

    There are a lot of interesting tidbits in this book.  For example, the book explains why cautious people make poor decisions when excited, or why
    you enjoy the more expensive option over its cheaper counterpart.

    One study in the book shows that Cheap is Good; But Free Seems Better. When asked if they’d like a 15-cent Lindt truffle or a one-cent Hershey’s Kiss, 73% of people buy the truffle. However, simply drop a penny off the price of each – so … a 14 cent truffle or a free Hershey’s Kiss – and only 31% choose the Lindt. Is eating the chocolate you don’t really want worth saving a penny? Probably not; but it is human nature.

    According to Ariely, we should re-examine and re-cast our understanding of economics to reflect the systematic (and unsurprising) irrationality of human nature. Ariely argues that greater understanding of previously ignored or misunderstood forces (emotions, relativity, and social norms) that influence our economic behavior brings a variety of opportunities to better predict individual motivation and consumer choice, as well as economic and educational policies.

    Other Links:

    Links to Other Speeches:

    By the way, there is a whole @Google Talks Series. It is worth exploring.  I especially like the Authors section.

  • Does the Kindle 2 Make Sense?

    The world is changing quickly. Just because you made money a certain way for a long time doesn't mean that this is how you'll continue to make money in the future. In fact the practical realities of time and technology suggest that this is not the case.  In this environment, you have to adapt and re-invent yourself.

    Creative Destruction in the Publishing Industry:

    Think about what has happened to publishing in the past decade. I'm talking about: television, movies, and music … but also newspapers, magazines, and the book industry.

    Personally, I read more than I ever did before; but I hardly ever go to a bookstore. I buy a lot less magazines than I used to; and I have to think hard to remember the last time I purchased a CD.

    That doesn't mean people aren't making money in these areas. I suspect it just means that different people are making the money. The industry is changing. It's a new game, with new rules, and new opportunities.

    How the Kindle Changes Amazon's Business Model:

    090306 Kindle Bezos Launch 250pI've had the new Kindle 2 for about two weeks; and I like a lot. 
    I'm impressed by the machine, but I'm more impressed with the business platform that Amazon is creating.

    Yes, they're going to sell a lot of books on the Kindle.  Amazon will build a base of brand-loyal Kindle users.

    Plain and simple, though, the Kindle is going to change Amazon's business model.

    Right now
    bestsellers cost $9.99 (which I suspect is a loss leader because they still have to buy the book from a traditional publisher) and certainly
    cannibalizes their business of selling paper books.

    They are signaling that they expect to make money differently in the future. That is part of the reason I like Amazon's decision to invest so heavily in the Kindle platform. It's a subsidized campaign to bridge to a new business model.

    You Will Have Access to New and Extended Forms of Content.

    More avenues will open to profit in different ways.  For example, I expect that Amazon will soon sell a paper copy of the book along with an
    electronic version for premium price. And you'll also soon have the ability to unlock more features.  That means that you'll be able to pay to consume what you
    choose (whether that's a one-time viewing, a permanent license, the
    right to print, share, or listen to the audio version or watch the
    multimedia presentation version of the content).

    They have an opportunity to re-define what you consider a "book" as well. And I predict that it won't be
    long before you can buy a book that is electronically enhanced with expanded content. Here is how I envision that might work. For example, let's say you buy a book on
    blogging. It might describe how to set up an account with TypePad or
    WordPress. The enhanced version of the book, which you paid extra for,
    could have links and setup wizards to do a lot of the heavy lifting for
    you. Do you want to allow search engines to index your new posts?
    Here's how to do it, and click this button to have us set it up for you.

    Think
    about how many areas would benefit from this marriage of content and
    skills transfer what about a book on trading that helped you build the
    pattern recognition or money management rules into your charting
    software or trading platform?

    Trojan Horse Strategy: This Will Turn the Publishing Industry Upside-Down.

    0903060 Trojan Horse
    I think the bigger opportunity is the Trojan horse that turns the publishing industry upside down.

    Think about how hard it's been for a new author to get a book published. Even before that, they had to find an agent. If that happens and they withstand the countless rounds of rejection, then the publishing house decides if one and how the book is released and the artist gets perhaps a dollar per book.

    In the near future, an author who understands social media and generating buzz published their book or pamphlet through Amazon's Kindle channel and keep the majority of the money. It's faster, frictionless, and more lucrative. 

    And Amazon can start to cut-out that pesky middle-man.  Why deal with a publisher, when you can let the author believe they are the publisher?  With this model, there is more margin for everyone (except the old-line publishers, who better be re-inventing themselves with a new value proposition).

    It's Not Just About the Publishing Industry; They're Out To Change Your Industry Too.

    As Amazon builds up the infrastructure to run their business,
    they've decided that they're willing to sell their excess capacity to
    you with a new product line of Amazon Web Services. It's on-demand technology capacity that is flexible, state-of-the-art and cost-effective.

    Yes, there is still a need for humans. So it's no surprise that Amazon has a new line of business they call the Mechanical Turk. And it's a marketplace for humans to do the work you want to outsource. It leverages Amazon's marketplace catalog and is another example of how they're becoming vertically integrated and well-positioned for the future.

    As a consumer, I like what I see; and it's only going to get better.

    Bottom Line:  Amazon's competitors and suppliers are going to have to adjust their business models.

    But the real point wasn't just about Amazon's foresight or skill. It's a challenge and a a wake-up call-to-action for you to look at what you do, and what you need to do … and for you to figure-out
    what your future company and the future you is going to focus on and do
    to succeed.  The environment is changing.  It is time to adapt and re-invent yourself.

  • Does the Kindle 2 Make Sense?

    The world is changing quickly. Just because you made money a certain way for a long time doesn't mean that this is how you'll continue to make money in the future. In fact the practical realities of time and technology suggest that this is not the case.  In this environment, you have to adapt and re-invent yourself.

    Creative Destruction in the Publishing Industry:

    Think about what has happened to publishing in the past decade. I'm talking about: television, movies, and music … but also newspapers, magazines, and the book industry.

    Personally, I read more than I ever did before; but I hardly ever go to a bookstore. I buy a lot less magazines than I used to; and I have to think hard to remember the last time I purchased a CD.

    That doesn't mean people aren't making money in these areas. I suspect it just means that different people are making the money. The industry is changing. It's a new game, with new rules, and new opportunities.

    How the Kindle Changes Amazon's Business Model:

    090306 Kindle Bezos Launch 250pI've had the new Kindle 2 for about two weeks; and I like a lot. 
    I'm impressed by the machine, but I'm more impressed with the business platform that Amazon is creating.

    Yes, they're going to sell a lot of books on the Kindle.  Amazon will build a base of brand-loyal Kindle users.

    Plain and simple, though, the Kindle is going to change Amazon's business model.

    Right now
    bestsellers cost $9.99 (which I suspect is a loss leader because they still have to buy the book from a traditional publisher) and certainly
    cannibalizes their business of selling paper books.

    They are signaling that they expect to make money differently in the future. That is part of the reason I like Amazon's decision to invest so heavily in the Kindle platform. It's a subsidized campaign to bridge to a new business model.

    You Will Have Access to New and Extended Forms of Content.

    More avenues will open to profit in different ways.  For example, I expect that Amazon will soon sell a paper copy of the book along with an
    electronic version for premium price. And you'll also soon have the ability to unlock more features.  That means that you'll be able to pay to consume what you
    choose (whether that's a one-time viewing, a permanent license, the
    right to print, share, or listen to the audio version or watch the
    multimedia presentation version of the content).

    They have an opportunity to re-define what you consider a "book" as well. And I predict that it won't be
    long before you can buy a book that is electronically enhanced with expanded content. Here is how I envision that might work. For example, let's say you buy a book on
    blogging. It might describe how to set up an account with TypePad or
    WordPress. The enhanced version of the book, which you paid extra for,
    could have links and setup wizards to do a lot of the heavy lifting for
    you. Do you want to allow search engines to index your new posts?
    Here's how to do it, and click this button to have us set it up for you.

    Think
    about how many areas would benefit from this marriage of content and
    skills transfer what about a book on trading that helped you build the
    pattern recognition or money management rules into your charting
    software or trading platform?

    Trojan Horse Strategy: This Will Turn the Publishing Industry Upside-Down.

    0903060 Trojan Horse
    I think the bigger opportunity is the Trojan horse that turns the publishing industry upside down.

    Think about how hard it's been for a new author to get a book published. Even before that, they had to find an agent. If that happens and they withstand the countless rounds of rejection, then the publishing house decides if one and how the book is released and the artist gets perhaps a dollar per book.

    In the near future, an author who understands social media and generating buzz published their book or pamphlet through Amazon's Kindle channel and keep the majority of the money. It's faster, frictionless, and more lucrative. 

    And Amazon can start to cut-out that pesky middle-man.  Why deal with a publisher, when you can let the author believe they are the publisher?  With this model, there is more margin for everyone (except the old-line publishers, who better be re-inventing themselves with a new value proposition).

    It's Not Just About the Publishing Industry; They're Out To Change Your Industry Too.

    As Amazon builds up the infrastructure to run their business,
    they've decided that they're willing to sell their excess capacity to
    you with a new product line of Amazon Web Services. It's on-demand technology capacity that is flexible, state-of-the-art and cost-effective.

    Yes, there is still a need for humans. So it's no surprise that Amazon has a new line of business they call the Mechanical Turk. And it's a marketplace for humans to do the work you want to outsource. It leverages Amazon's marketplace catalog and is another example of how they're becoming vertically integrated and well-positioned for the future.

    As a consumer, I like what I see; and it's only going to get better.

    Bottom Line:  Amazon's competitors and suppliers are going to have to adjust their business models.

    But the real point wasn't just about Amazon's foresight or skill. It's a challenge and a a wake-up call-to-action for you to look at what you do, and what you need to do … and for you to figure-out
    what your future company and the future you is going to focus on and do
    to succeed.  The environment is changing.  It is time to adapt and re-invent yourself.

  • First Impressions of the New Kindle.

    090227 Kindle

    Frankly, I didn't think I would love it. I was wrong.  Perhaps more important than just "loving it", I like using it.

    It's thin, light, and easy-to-read. At first I wasn't sure it felt right … But, at first, I didn't buy the leather cover. Believe it or not, that made a big difference. I like that it now feels like a "book" in my hands. There is a lot to like, and I got used to it very quickly.

    A Mini Feature Review:  Here are the basics.

    • Terrific Display: it uses fast and crisp E-Ink technology;
    • Huge Capacity: it will hold over 1,500 books;
    • Wireless: it has built-in free access to Sprint's data network;
    • Great Battery Life: it lasts for more that 4-days worth of reading, even with the wireless on;
    • Built-in Keyboard: to annotate text, or to use search capabilities and the Internet;
    • Text-to-Speech: surprisingly well done and useful while driving or doing things.

    Looking Good Is A Good First Step.  While I was waiting for my Kindle to come, I guess the thing I questioned most was whether I'd actually read on it.  Right out-of-the-box, my first impression was that the Kindle had a great display.  I took it outside, and it still looked terrific, even in the bright sunlight. I did have to adjust the font size for it to feel "right" to me. However, it was easy to figure out what felt
    natural (and here is a hint for the older readers … at night, a slightly bigger size is what feels natural to
    me).

    090227 Kindle Is Pencil-Thin
    Having Lots Of Things To Read Is Nice Too    . Carrying a bookcase full of books in pencil-thin package is pretty cool.

    There's over a quarter million books available for the Kindle, and that number is growing rapidly. Many best-sellers are just $9.99, which is much cheaper than the paper versions.  In addition to books, Amazon has made it easy to read web and blog content with the built-in browser and free Sprint data network. Also, you can convert and transfer Microsoft Office and PDF files by e-mailing them to your Kindle's e-mail address.

    Cheap Is Good, Free is Better.  To get you used to reading on the Kindle and using Amazon's store to get the content, they've made an impressive amount of books free. The first book I downloaded was a free copy of the Bible. I heard it was a Good Book. That's good business on many levels.

    Download Sample Chapters To Make Sure You Like It.  Taking that concept a little further, Amazon also makes it easy to download a few sample chapters of many books to your Kindle before buying. This has already changed how I use Amazon, and it adds a key benefit that the storefront bookstores relied on, browsing several books to find the one that suits me. Now, I can do that anywhere and anytime.

    And once the sample is on your Kindle, it's only takes one-click to get the whole thing. It's all very fast, very convenient, and very clever marketing.

    Yes, I sense
    it's the future. And I'm a gadget guy who loves to play with the future
    early. However, I'm also a gadget guy who has a pretty big gadget graveyard for
    things that didn't work so well. The Kindle works well. I can tell
    because I'm using it more, not less.

    All-in-all, I'm impressed.  Next time, I will talk about the business implications of the Kindle on Amazon and its customers, competitors, and suppliers.  Till then, here are a few other links worth exploring.

  • First Impressions of the New Kindle.

    090227 Kindle

    Frankly, I didn't think I would love it. I was wrong.  Perhaps more important than just "loving it", I like using it.

    It's thin, light, and easy-to-read. At first I wasn't sure it felt right … But, at first, I didn't buy the leather cover. Believe it or not, that made a big difference. I like that it now feels like a "book" in my hands. There is a lot to like, and I got used to it very quickly.

    A Mini Feature Review:  Here are the basics.

    • Terrific Display: it uses fast and crisp E-Ink technology;
    • Huge Capacity: it will hold over 1,500 books;
    • Wireless: it has built-in free access to Sprint's data network;
    • Great Battery Life: it lasts for more that 4-days worth of reading, even with the wireless on;
    • Built-in Keyboard: to annotate text, or to use search capabilities and the Internet;
    • Text-to-Speech: surprisingly well done and useful while driving or doing things.

    Looking Good Is A Good First Step.  While I was waiting for my Kindle to come, I guess the thing I questioned most was whether I'd actually read on it.  Right out-of-the-box, my first impression was that the Kindle had a great display.  I took it outside, and it still looked terrific, even in the bright sunlight. I did have to adjust the font size for it to feel "right" to me. However, it was easy to figure out what felt
    natural (and here is a hint for the older readers … at night, a slightly bigger size is what feels natural to
    me).

    090227 Kindle Is Pencil-Thin
    Having Lots Of Things To Read Is Nice Too    . Carrying a bookcase full of books in pencil-thin package is pretty cool.

    There's over a quarter million books available for the Kindle, and that number is growing rapidly. Many best-sellers are just $9.99, which is much cheaper than the paper versions.  In addition to books, Amazon has made it easy to read web and blog content with the built-in browser and free Sprint data network. Also, you can convert and transfer Microsoft Office and PDF files by e-mailing them to your Kindle's e-mail address.

    Cheap Is Good, Free is Better.  To get you used to reading on the Kindle and using Amazon's store to get the content, they've made an impressive amount of books free. The first book I downloaded was a free copy of the Bible. I heard it was a Good Book. That's good business on many levels.

    Download Sample Chapters To Make Sure You Like It.  Taking that concept a little further, Amazon also makes it easy to download a few sample chapters of many books to your Kindle before buying. This has already changed how I use Amazon, and it adds a key benefit that the storefront bookstores relied on, browsing several books to find the one that suits me. Now, I can do that anywhere and anytime.

    And once the sample is on your Kindle, it's only takes one-click to get the whole thing. It's all very fast, very convenient, and very clever marketing.

    Yes, I sense
    it's the future. And I'm a gadget guy who loves to play with the future
    early. However, I'm also a gadget guy who has a pretty big gadget graveyard for
    things that didn't work so well. The Kindle works well. I can tell
    because I'm using it more, not less.

    All-in-all, I'm impressed.  Next time, I will talk about the business implications of the Kindle on Amazon and its customers, competitors, and suppliers.  Till then, here are a few other links worth exploring.